NEW YORK: Money manager Guy Albert de Chimay indicted on grand larceny and forgery charges – money used to pay divorce lawyers

GUY ALBERT DE CHIMAY GETS PROBED. SHOULD HIS DIVORCE LAWYERS BE WORRIED? The Securities and Exchange Commission, in conjunction with the New York County District Attorney’s Office and the Bermuda Monetary Authority has charged  Guy Albert de Chimay (“who claimed ties to the Belgian royal family (of the famed beer brewed by Trappist monks”))with larceny and forgery and claim that he used $600,000 USD investor money to fund his extravagant lifestyle and pay his divorce lawyers. Business Week:

Chimay, 47, chairman and chief investment officer of Chimay Capital Management Inc., was arrested today in Wrightsville Beach, North Carolina, on a New York state warrant, said Adam Kaufmann, chief of the investigation division of the Manhattan District Attorney’s office.
The U.S. Securities and Exchange Commission sued Chimay today, accusing him and his firm of fraud for touting investments he claimed were tied to the Chimay royal family of Belgium, and then stealing millions of dollars to pay his divorce lawyers and the mortgage on his house in the Hamptons on Long Island east of New York City.

The whole brouhaha has to do with a “fraudulent bridge loan scheme” that purportedly was to make short term loans from pooled funds but which, instead, bankrolled Chimay’s high life. Mr. Chimay was able to obtain over six million dollars from investors according to the SEC’s website:

The Commission alleges that the defendants successfully obtained at least $6 million dollars in BLF investments in 2008 and 2009. According to the Commission’s complaint, the defendants did not use these funds to make short-term loans but rather misappropriated them for a host of improper purposes, including to bankroll Chimay’s personal and business expenses, and to pay other investors. Among other things, the Commission alleges that nearly $600,000 in investor funds were diverted to pay Chimay’s divorce lawyers, and that additional funds were misappropriated to pay Chimay’s mortgage and credit card bills.
The complaint alleges that the defendants violated Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
The Commission seeks, among other emergency relief, a temporary restraining order: (i) enjoining the defendants from future violations of the federal securities laws; (ii) freezing the defendants’ assets and repatriating the defendants’ fraudulently obtained assets found overseas; (iii) directing the defendants to provide verified accountings; and (iv) prohibiting the destruction, concealment or alteration of documents. In addition to this emergency relief, the Commission seeks preliminary and permanent injunctive relief and civil money penalties against the defendants as well as disgorgement by the defendants of their ill-gotten gains plus prejudgment interest.

Will he have to return the $600,000 he paid his divorce lawyers? That is the big question. And what did they do for him that warranted that much money? We will update this report as we get to the bottom of the Chimay divorce drama. Stay tuned.